What Are The Risk Factors For Adobe Inc. (ADBE)?

As of Friday close, Adobe Inc.’s (NASDAQ:ADBE) stock was up $16.96, moving up 4.37 percent to $405.45. The average number of shares traded per day over the past five days has been 4,181,700 shares. 3 times new highs have been achieved over the past 5 days, with a $14.44 gain in that time frame. In the last twenty days, the average volume was 3,180,600, while in the previous 50 days, it was 3,618,170.


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Since last month, ADBE stock retreated -6.07%. Shares of the company fell to $370.27 on 05/12/22, the lowest level in the past month. A 52-week high of $699.54 was reached on 01/03/22 after having rallying from a 52-week low of $370.27. Since the beginning of this year, ADBE’s stock price has dropped by -28.50% or -$161.61, and marked a new high 1 time. However, the stock has declined by -42.04% since its 52-week high.

Adobe Inc. (ADBE) last reported insider trading activity 12 days ago on May 02. Lewnes Ann, the EVP, CMO, Corp Strategy & Dev of the company, disposed of 793 shares for $400.00 on May 02. It resulted in a $317,200 divestment by the insider. WARNOCK JOHN E sold 5,000 shares at an average price of $404.30 on Apr 26. The insider now owns 405,165 shares following the transaction. On Apr 25, EVP, CPO, Creative Cloud Belsky Scott sold 2,710 shares at $410.18 apiece. The transaction was valued at $1,111,588.

Valuation Metrics

Right now, Adobe Inc. (ADBE) has a P/E ratio of about 40.27. The stock’s beta is 1.09. Besides these, the trailing price-to-sales (P/S) ratio of 12.16, the price-to-book (PB) ratio of 13.92, and the price-to-cash flow ratio of 28.70 may also be considered.

Financial Health

In the three months ended November 29, Adobe Inc.’s quick ratio stood at 1.00, while its current ratio was 1.00, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending November 29 was 0.26, and the total debt-to-equity ratio was 0.30. On the profitability front, the trailing twelve-month gross margin is 88.00% percent. In the year ended November 29, operating margins totaled 36.70%. Based on annual data, ADBE earned $13.92 billion in gross profit and brought in $15.79 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 26.00%. Return on equity (ROE) for the past 12 months was 34.00%.

In Adobe Inc.’s quarter-end financial report for November 29, it reported total debt of $3.63 billion against cash and short-term investments of $1.96 billion. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. ADBE’s revenue rose 8.38% to $4.11 billion during the quarter, while net income inched up to $4.26 billion. While analysts expected Adobe Inc. to report $3.2 quarterly earnings, the actual figure was $3.2 per share. During the quarter, the company generated $1.79 billion in EBITDA. The liabilities of Adobe Inc. were 12.2 billion at the end of its most recent quarter ended November 29, and its total debt was $4.67 billion. The value of shareholders’ equity is $472.5 million.

Technical Picture

This quick technical analysis looks at Adobe Inc.’s (ADBE) price momentum. With a historical volatility rate of 57.60%, the RSI 9-day stood at 51.34% on 13 May.

With respect to its five-day moving average, the current Adobe Inc. price is up by +3.69% percent or $14.44. At present, ADBE shares trade -3.57% below its 20-day simple moving average and -26.25% percent below its 100-day simple moving average. However, the stock is currently trading approximately -11.68% below its SMA50 and -34.78% below its SMA200.

Stochastic coefficient K was 36.05% and Stochastic coefficient D was 24.47%, while ATR was 20.22. Given the Stochastic reading of 65.20% for the 14-day period, the RSI (14) reading has been calculated as 48.05%. As of today, the MACD Oscillator reading stands at -5.09, while the 14-day reading stands at -7.23.

Analyst Ratings

Exane BNP Paribas launched its rating on Adobe Inc. (NASDAQ: ADBE) to an Outperform in a note to investors on March 29, 2022. Adobe Inc. (ADBE) has been rated Overweight by analysts. According to 0 brokerage firms, ADBE is a sell, and 6 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 5 analysts rate Adobe Inc. stock as buy, with 21 recommending it as overweight.

With a median target price of $570.00, the current consensus forecast for the stock is $455.00 – $650.00. Based on these forecasts, analysts predict Adobe Inc. (ADBE) will achieve an average price target of $562.66.

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